Canada’s Focus Graphite (TSXV:FMS,OTCQX:FCSMF) has largely kept out of the spotlight since August, when it provided the first pilot plant results from its Quebec-based Lac Knife graphite project. That changed today, however, with the company’s release of an updated preliminary economic assessment (PEA) for Lac Knife.
The update, which is based on those August results, shows that at an 8-percent discount rate, Lac Knife has a pre-tax internal rate of return of 36.4 percent and a pre-tax net present value of $316.9 million; after tax, those values are 28.6 percent and $185.3 million, respectively. Cost of production sits $458 per tonne of concentrate, while the project’s pre-tax payback period is 2.4 years (2.8 years after tax).
Operational highlights include an open-pit mine life of 20 years at 300,000 tonnes per year, and life-of-mine production of 6 million tonnes of mill feed at a grade of 15.66-percent graphitic carbon. The PEA places life-of-mine project production at 880,877 tonnes of concentrate at 96.6-percent Ct.
Commenting on the results, Don Baxter, president and chief operating officer of Focus, highlighted that they show “that all flake concentrate above 200 mesh can be produced at 98% Ct thereby eliminating the need to use third party purification proposed in our original PEA study.” He also said that “[t]he updated PEA indicates that Lac Knife shows positive economic potential based on current run of mine prices for markets that are here today.”
Moving forward, Focus will continue to develop value-added products, such as spherical graphite for lithium-ion batteries, for technology markets. Gary Economo, the company’s CEO, also said that today’s results put the company on the path toward “financing, securing off-take agreements, permitting and construction.”
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Focus Graphite is a client of the Investing News Network. This article is not paid-for content.